On this week’s episode, Matt sits down with Quentin Smith, Jr. Quentin has over 40 years of experience providing management service to publicly and privately held businesses and is Chairman of the Board of Banner Health, and President of Cadre Business Advisors, LLC, a consulting firm that focuses on strategic planning, performance improvement and crisis management. This episode begins with a detailed description on Quentin’s life growing up in Gary, Indiana and his path in getting to where he is today. He specifically talks about the connections that he made throughout his life that propelled him forward in his career, even personal connections from college that later influenced his career. Quentin also discusses what it takes to be a good board member for corporate boards, the Fleischer Scholars Program at the Walton College, and Mort Fleischer and his concept of the mental balance sheet.

As a result, you know, he figured either I was

just going to fold completely, or it was going to make me like

tungsten steel because he knew that the environment that I was

going to have to live in was going to be tough. It was going

to be still prej-, you know, a lot of prejudice. And you got to

work harder than the next guy because of the color of your

skin.

Excellence, professionalism, innovation and

collegiality. These are the values the Sam M. Walton College

of Business explores in education, business and the

lives of people we meet every day, I'm Matt Waller, Dean of

the Walton College and welcome to the be epic podcast. I have

with me today, Quentin Smith, Jr, Chairman of the Board of

Banner Health, and President of CADRE Business Advisors, LLC, a

consulting firm that focuses on strategic planning, performance

improvement and crisis management. Quentin has over 40

years of experience providing management service to publicly

and privately held businesses. And he is on the board of some

very impressive companies, one of which I tend to be pretty

familiar with. He's on the board of Store Capital, a publicly

traded company, you might want to look up really interesting.

There's, it was started by a fellow by the name of Mort

Fleischer, who has been involved with the Walton College and the

University of Arkansas. Mr. Smith is also on the board of

Orion Group Holdings, Arizona public service, and many other

entities as well. So Mr. Smith, thank you so much for joining us

today. I really appreciate it.

It's my pleasure. Good to be here.

You come from a really interesting background,

as we talked about earlier. Your father was one of the Tuskegee

Airmen, airmen, which is amazing to know someone whose father was

one of the pilots for Tuskegee Airmen. And so you had an

interesting father. And I know you had a wonderful mother as

well, based on what you told me. And you've had an amazing

career. So would you mind telling us a little bit about

your background and your your career?

Sure. And I think it's good for context for what

I'm going to say in the questions I'm going to answer. I

didn't come from a family of wealth or anything like that. I

grew up in Gary, Indiana. And for those of you that don't know

about, Gary, it's not the best place on the face of the earth

to be raised it was when I was growing up as a kid. But it

turned rapidly into the kind of type of city that was retreating

rather than then going forward. And I had the opportunity to

just be like some of my friends who are still in the same

corner, you know, my age, no, no ambition, no, no career path.

But instead, because of both of my parents, I ended up on a

different track. My mother was a librarian. So I was a latchkey

kid before the phrase was formed. So when I got out of

school, I would wait for her at her library, and I'd read

everything in there. So I became a reader out of boredom, and

because of what she was doing, my father-

That probably gave you a huge advantage I would

think?

It did because I couldn't talk to my friends

about some of the things I read, because they didn't know any of

these books or authors. But as I got older, you know, having that

depth of experience, the reading has paid off in some regards and

made me- I think, more well rounded. But my dad was a school

administrator started off as a Latin and English teacher. So he

was very insistent upon me understanding and being able to

speak the King's English. He thought that was very important.

And when we would miss miss-speak, at dinner he would

correct us. So I learned how to make sure I spoke well. And just

a little fine point, because I know he's listening to this,

even though he passed away a few years ago. He was one of the

original Tuskegee Airmen. There's a big difference between

the first 101 and the rest of the guys so I was gonna make

that point. But anyway, so so he taught me that education was the

most important thing I could have because once you have it,

no one can take it from you. And if you get the right kind of

education, it can bode well for you for the rest of your life.

So I grew up in that kind of environment. But along the way,

my friends that I was hanging out with junior high school

weren't the best characters in my father's mind. So he sent me

to military school. So I spent high school in military school,

a place called Howe Military just east of Notre Dame in

Indiana. And that helped me become a stronger person because

out of 450 kids at that military school, there were eight that

were black, and I was the only one black in my class. And as a

result of my the way my father raised me when I graduated, I

was president of the class, I was a top commanding officer, in

terms of awards. I was in the varsity club, was the editor of

the paper. It was, as my father would say, to A Boy Named Sue

kind of situation for your students, they won't know what

Boy Named Sue means, but tell them look it up and find that

that that song, and they'll know what I mean. So he made sure

that I was tough as nails. And it's helped me in my career. So

that's that's the background. And I went to Purdue because it

was right down to the I-65. Highway close by. And it was

cheap it was $500 a year to go to Purdue in 1968. And it's not

that anymore. And I started off in electrical engineering. But

7:30am calculus classes made me think twice about that. So the

counselor said, I'll give you a hint, the engineers work for the

business guys. So I switched to the Krannert School of Business,

and graduated a double major industrial management computer

science, and was recruited for my first job to Southern

California Edison in Santa Monica, California. So I went

from West Lafayette to Santa Monica in about six days. And

the rest of it is pretty lengthy. But I ended up working

in industry for about eight years, figured out I'd be a

pretty good management consultant. I like the diversity

of problems, you know pretty quick study. So I moved from

Southern California Edison to Hughes Aircraft, to Universal

Studios, to Great Western savings to get a broad spectrum

of different industries. So I understood those. And then I

started my own company in 1983. And was started with a

consulting firm and then bought a company for about 35 million

and tagged that on to that it was a data center processing

company for banks. So that in 92, tried to retire, didn't

work. And we moved from LA to to Scottsdale in 92, as well. So

I've been here in Scottsdale since 92. been involved in a lot

of different things done some turnarounds of companies that

are in bad shape been on public boards, taken two or three

companies public. Just a very fortunate set of circumstances

for me personally and professionally. And I've met

some great people along the way, one of them being the person

that we have common denominator in Mort Fleischer. So that's to,

you can say that's my story. And I'm sticking to it.

Well, what a great story and you know, in, in

starting your own company in 1983. So 39 years ago, almost 40

years ago.

Yea, 20, 32 [years].

So, and then you eventually bought a company that

was a data center processing company for banks. And but what

what made you- How did you find that deal that opportunity?

Well, two things that were important to do in

that deal. The first one was there's a there was a guy his

name is Reginald Lewis. He wrote a book entitled "Why Should

White Guys Have All the Fun?". Reginald was the first black

entrepreneur to do a leveraged buyout in the 80s he bought

Beatrice Foods for a billion dollars. He was one of my

fraternity brothers. I had a chance to meet him and he said,

Quentin you- at some point you need to own something, not just

work for somebody, you need to own something. So he introduced

me to his banker who did that deal. And so put a pin in that

as one resource. The other resource is one of the companies

that co-own, this data center company that I bought was one of

my clients in LA is called Coast Savings Bank. And I made an

offer to them to buy that data center company from him and the

other banks that owned it. And Reginald introduce me to his

bankers, Drexel Burnham, they did the financing, and we bought

it for 35 million. That's how it- that's how it was done.

Well, I remember back, you know, when I was a

young, I was an undergraduate student in business when

Reginald made that deal with Beatrice-

Right.

Which was really- and so it made the news I I was

just newly reading the Wall Street Journal back then. And I

remember reading that, and if I remember correctly, he died at a

fairly young age, didn't he?

Yeah, he had brain cancer. He died at 50, I

believe. But but he was able to touch a lot of people like me

along the way, and one of the people that that I've met along

about the same time as Reggie was Vernon Jordan. Vernon was an

attorney but he was a deal maker, rainmaker guy ended up

becoming Bill Clinton's number one outside guy, and Vernon told

me, you need to figure out how to get on corporate boards,

because that's where the real power is. So between Vernon and

Reggie, they were the like, the keys for me to get at a young

age an understanding of what is out there if you're willing to

apply yourself. So on one track, I started preparing myself to be

a worthy board candidate for a corporate board. And I've been

on six public company boards as a result of that, and a couple

of private boards, and then with Reggie to be able to have enough

sense about what to pick as a target to buy, and being able to

put the financing together to buy it.

Well, you know, it shows you how it's not, it's not

enough to just know people. But if you've got the capabilities,

and you're willing to work hard, knowing people can make a big

difference, and-

Exactly.

You know. And it's funny, you know, of course, you

said it was your he was your fraternity brother. That that's

something people don't often realize that when you're in

college, a lot of the people that are your friends, there's a

certain number of them that are going to really do quite well

and possibly help you in business later. You don't

realize it when you're rubbing shoulders with them, but but it

happens.

Right. And while you're there, you're just trying

to get get out of there in four years, and get your get your

your graduation over with. And that's all you're really focused

on, or maybe partying a little too hard, depending on what

school you went to. But what, you know, the whole objective is

to get that I graduated from a college, which gives you the

ability to be credible to get a real job. So that that's where I

was focused. But then after you get out, you realize networking

is extremely important. If you looked at my personal balance

sheet, this is what Mark talks about your personal balance

sheet, the biggest number on that balance sheet isn't the

money I have in the bank. It's the network of people that I

know. And that trust me, and I trust them. And that I can use I

use don't mean that in a negative way, but use to

leverage certain outcomes, either for myself or for others,

like they have done for me.

You're right, Mort talks about that a lot. A great

concept. And he also talks about, you know, thinking of

yourself as a missile-

Right, a guided missile right.

A guided missile. And so you have to make course

corrections as you're as you're going. But you're going

somewhere.

Yea you have to hit a target. Otherwise, there's

what's the point, right? But even though you have a target,

as you were saying sometimes the wind blows a little differently

or, you know, some something goes wrong with one of the

engines isn't firing, right? And you have to make those course

corrections. So it's yeah, that those are two really good

analogies that Mort has come up with

He has and of course, he shares that with a

lot of young people. Especially through the Fleischer Scholars

Program, which I know you're a board member of. Is that

correct? Trustee?

Yes. I enjoy that relationship immensely.

Then you're also on the board of Store Capital,

which is an amazing company. Would you mind talking about

Store Capital just a bit?

Sure. Store Capital is the third is kind of

3.0 for Mort, he started with a company called FFCA, franchise,

Finance Corporation of America, which was doing all the real

estate, and land, buildings and land financing for people that

bought franchises. So he would be the underwriter of that he

would own the land and the buildings and rent them back or

lease them back to the person that owns the McDonald's or the

KFC or whatever. He sold that company to GE Capital 2001. He

did another 2.0 of FFCA. After that, with some partners that as

Mort would say - that don't do well with partners. And this was

a case where it sounded good on paper, but it didn't work out.

And he moved on from that. And then in 2014, established Store

Capital to do fundamentally the same thing sale leaseback of

corporate properties, but this time is bigger properties. So

companies that are middle market have big manufacturing buildings

or distribution centers, we would- those those companies

have those buildings that they paid for, and the value of those

buildings just sit on their balance sheet as a number, that

cash is just a representation of the value. But for them to

expand, you have two choices, you can go to the bank and get

more debt. Or you can do what we do for them at store, which is

we'll buy that building from you, pay you cash for it, and

you become a tenant of your own building, you pay us rent. So

you get that cashed up to expand your business, you stay put, you

don't have to move. Business as usual from the day before you do

the deal with us to the day after. And you have the ability

to expand without incurring that kind of debt. So store was in is

in that business, we have about 3000 properties that are across

the United States. As I said, we took Store public in 2014. And,

and most recently, because of its success, it's become a

acquisition target. And the company has an offer pending to

buy it for $14 billion.

Impressive. So you've been on the boards of

quite a few firms. What does it take to be a successful board

member to really make a positive contribution?

Well, the first thing is having some expertise

that if you are added to that board will help the company be a

better strategic thinker. And develop a strategic outlook and

execute on that and help the management team to be able to

define that strategy and to help them execute. But you have to as

a board member, you have to understand the fine line between

governance, which is oversight. That's what boards do, and

crossing the line into operations trying to tell the

CEO well, you need to do this. So you have to manage that fine

line, you can be helpful and instructive, and provide

oversight, but you have to be careful not to try to run the

business. So experts- a certain expertise that's added value,

knowing where that line is. And making sure you understand what

the rules are about governance and what your responsibility-

your fiduciary responsibilities are so that you fulfill those

and you don't run a file of the Securities and Exchange

Commission or any other regulators.

If you wouldn't mind that would I'd like to go

back to the Fleischer Scholars Program.

Sure.

I really. I mean, I remember the first time Mort was

telling me about it. I'm like, yeah, he was telling me you

know, your brains like a servo mechanism

Right-

and all this kind of stuff. What are you talking

about? The more he explained that, the more I really liked

it. And I thought what a great thing for students to learn,

especially, you know, when they're young, preferably before

they get into college even. And I remember when he told me about

the mental- what did he call it, the mental balance sheet. We

mentioned that early- earlier. And he says and it's funny

because Mort thinks in terms of finance and economics so much

doesn't he?

Right, right.

I remember, I think one of the first times I talked

to him about the store capital. I said, how did you know this

was an opportunity and he said, at a high level, there was a, a

market gap, there was, there was a need that wasn't being met,

there was a problem in the market. And I won't go into all

that. But he said, we solved a problem in the market.

That's absolutely right.

You know, and he's so good at explaining things

like that. But I remember, when he was talking to me, and I

thought, a mental balance sheet. So I thought, okay, a balance

sheet has assets, liabilities, those are very clear, and your,

your net worth. And he said, here's how I think about it. And

you mentioned earlier, you know, there's this empirical knowledge

you have, that it's the sum of all of your experiences, and

your connections, your people you're connected to. And then

you've got your intellectual capital, which has to do with

your academic and life experiences, you've got your

liabilities. And liabilities, things like things you don't

know, connections, you don't have and things that are

missing, and then your moral compass. You know, he said,

those four things together, make up your mental balance sheet.

And so, you know, we had the students and these, by the way,

for those listening that don't know, the Fleischer Scholars

Program is like a bridge program

Mhm

For students that they go to before they go to

college. And the students start thinking through these things,

what, what, what is my life experience? What do I want it to

be? Those kinds of things. And he talks about this thing called

a three legged stool. And, again, this was another thing

where I'm like, what, what's a three legged stool have to do

with this? but but one of them has to do again, it ties back to

some degree to the, to the balance sheet, the mental

balance sheet, but, you know, you've got to the empiricism,

you're the sum of all your personal experiences, meaning,

empirical. So as you go through time, you collect all of these

experiences and connections, and they empirically affect what

you're prepared to do and your assets, kind of your, like your

assets. And, but your brain, he said, is like a servo mechanism.

And so you know, that you you're, it's kind of like a heat

seeking missile, but you got to know what your goals are.

Right.

And then you're a missile. And you've got to seek

out this target. And, but, you know, and so you use all of this

to create a mental roadmap, where you treat your brain like

a computer, and you know that everything you're doing is

programming. And so one thing I really liked about that is, and

I really believe this, like, when you were young, Quentin,

and you were, and your mom was a librarian, and you were reading

all these, these books, you were affecting your brain, you were

programming at some degree, with a wide variety of knowledge. And

really just the ability to read well, I mean, reading well,

helps you write well, and writing well, is very helpful in

life. But, but, you know, Mort's come up with these really

interesting metaphors that instead of using fancy, you

know, psychological terms, he uses these simple metaphors that

anybody can understand. So that's what I really liked about

it.

Well, yeah, I mean, you're actually right,

Mort knows how to crystallize things. And, for me, you know,

it was different because there was no doubt I was going to

college from the time I was born, I was gonna go to college,

there was my father probably would have, you know, taken me

out to a dessert just dropped me if I said I wasn't gonna go to

college. So that was a foregone conclusion. But the targets of

the Fleischer scholars are primarily those kids, where

their parents have never been to college. No one in their family

has been to college, they might be the first generation to go to

college. So you got two things, you've got to deal with. One,

you've got to orient them to the fact that going to college is a

worthwhile endeavor, and that it will pay off if you subject

yourself to going to college. And then once you get a young

person to understand that, the next thing that comes to the

parents, and the question is okay, that's great. You've now

convinced my son or daughter, they should go to college, well,

how am I going to pay for that? So it's a tree that falls in the

woods with nobody around, it doesn't make a sound, because

you've got to have the two of those linked together to be able

to get the parent and the kid to just decide this is worthwhile,

and Fleischer Scholars is that glue that helps parents and the

kids understand both sides of those equations. So one of the

elements about Fleischer that makes it even more different

than it already is, in terms of getting a young person to

understand the mental balance sheet metaphor is that we have

another tool that helps crystallize all of the

scholarship money that's floating around in the air, how

to find something for them. So they can finance going to school

and have even more than just tuition and books. And, and

residence fees, but money leftover to be able to put some

on the kitchen table for their for their their family. So those

things combined makes Fleischer very unique, very powerful. And

for people that get it, it's paid off considerably. Some,

some don't get it, and then the parents don't get it. But for

the ones that have and there have been quite a number. It's

been very effective.

Well, Quentin, thank you so much for pouring

into the Fleischer Scholars Program and for serving as a

trustee to advance it, I personally have witnessed the

effects of it on students. And our results have been really

good in terms of, you know, the number of students that go to

school and then finish. So I'm very grateful for what you're

doing. With that. It's, it's really making a positive

difference. And I know that, you know, someone like you, you

could do anything you want. You don't have to do this. And same

with Mort, he could just go off and do whatever he wants. But

he's electing to serve mankind, if you will, through through

something like this.

And on top of that a lot of people are like

Mort, that want to do good things. But they want other

people's money Mort has put his money where his mouth is,

literally. And I admire him for being that dedicated. And it

will survive financially. It- through his estate. And his

estate has only one benefactor. And that's Fleischer Scholars.

So it's you know, he's an exceptional man. I've been like

I said, the biggest thing about balance sheet are people that I

know and Mort's in the top three, other than other my

parents. He's in the top three.

Wow.

I enjoyed working with him. And when it was time,

when he asked me to to get involved with Fleischer

scholars, it wasn't, it wasn't there was no option. It was yes,

sir. I'll do whatever you want me to.

Well, tell him I said hello. I really miss

spending time with him. I haven't seen him for a while.

But-

Yeah, yeah he's enjoying life. And he and Donna

are you know, traveling. He's my father would do something else

that was really, really good. He, this was back when he only

had an answering machine, right? And he would call me knowing

that I was not going to be home to answer the phone and he would

leave a single message, which was a question. When was the

last time you smelled the roses? That's it. That was his way of

saying I know you're a hard worker. I know you get really

into what you're doing. But you got to take the time out. Smell

the Roses, whatever, you're-

That is good advice.

Yep.

That is so good. You know, one time this was a

quite a few years ago. One- I think it was- so I've been here

at the University of Arkansas for 28 years. And I've been Dean

for 8. But I remember one day I was- and I was a very hard

working professor. You know, I tried to I wanted to be the best

teacher. I wanted to be the best researcher. I was really

ambitious. And I realized one day I looked out my window I

thought this is a beautiful campus here in the Ozarks, and I

never think about it. I walk across it, and my head's always

on work, you know?

You're like this- the tunnel you just you know,

like you don't see all of that right?

So I got up and I took some time and I walked out

on campus and I really enjoyed it ever since then I, I do that

periodically. It's- but to your father's advice is so good. It's

good for your mental health and just being able to enjoy life.

Yeah, another thing I told him I said, the

older I get the smarter he gets. Because, because I, you know, I,

he and I were would do this when he was forming me, you know,

because it was it was pretty brutal given I'll give you all

the examples if you got a minute. So I was probably about

eight, nine years old, and I was down at the local YMCA and there

was a flyer that says learn how to swim for $15. So I come home

with the flyer and I said, dad, I need 15 dollars, I'm going to

learn how to swim. And he goes, you know, you don't need $15 I

said what was that it's not free. He said, get your swim

shorts on- get your swim shorts, come with me. So Gary, if you

know geography Gary's right at the bottom of Lake Michigan. Our

house was probably eight miles as the crow flies from Lake

Michigan. Okay, so he piles me in the car takes me out to the

beach and Lake Michigan has me going a little restroom change

clothes. Now my dad- can't tell by looking at me- My mother was

5' 1" my father's 6' 3" to 4". Okay, so I'm right in the

middle. So he picks me up over his head, walks all the way out

into Lake Michigan up to here and throws me and walks back.

Oh my goodness.

So he goes back and he's sitting, reading a

book. And about it felt like an hour later, but a few minutes.

I'm here I am- I'm back on the beach. And he goes, so how did

you get here? I said I guess I swam. He said I told you you

didn't need that 15 dollars.

Oh, my goodness.

That's the way he raised me. Okay. Fortunately, I

was able to withstand that approach. Because he I mean, I

all the things I did at the military school. Just top of

everything. I'm given the president speech as a graduating

class, I look in the audience. I see my mother, my aunt, my

brother and an empty seat. I figure oh my father's out having

a smoke or something. I finished, we graduate- graduate.

I asked, where's Dad, he didn't come. So two hours from Military

School back to Gary, I'm just steamed coming out of my- I get

in the house. And I'm all in his face. And he says, when you do

something worth me showing up, let me know. That's the way I

got raised.

Whoa-

Yeah

High standards.

I mean, he and as a result, you know, he figured

either, I was just gonna fold completely, or it was gonna make

me like tungsten steel, because he knew that the environment

that I was going to have to live in, was going to be tough. It

was going to be still preJ-, you know, a lot of prejudice. And

you've got to work harder than the next guy, because of the

color of your skin. And he would not let me leave the nest unless

I had that tungsten steel coating first. And it ser- it

has served me well. He raised my brother the same way. He didn't

he didn't make it, he- it broke him. But for me that that's what

keeps you know, the- Dracula away. I mean, that's, that's

that's the skin I have around me from what he built around me to

be able to, to give me that tungsten. So very, very

interesting background.

Well, Quentin, congratulations on your

tremendous career success. And thank you again for what you're

doing with Mort and and the Fleischer Scholars Program. It's

needed and making a positive difference in society. So thank

you.

Well, in fact, even just one kid, we've done it

done a lot, but we were doing it but by the hundreds and

hopefully get to the 1000s. And, and it's a bit it's one of the

best things I'm involved in as well as the hospital system. So

I thank you for the opportunity to talk and to make your

acquaintance. I'm sure we will probably talk again and maybe

make a trip down with Mort to to the university and in the

future.

I would love that.

Okay, take care. Have a great week.

On behalf of the Sam M. Walton College of

Business, I want to thank everyone for spending time with

us for another engaging conversation. You can subscribe

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